A sign is displayed above the Deutsche Bank headquarters in the Aurora business park in Moscow, Russia.
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Deutsche Bank Deutsche Bank has reached a settlement with nearly 60% of plaintiffs in a long-running lawsuit alleging that it underpaid when it acquired Postbank more than a decade ago.
Deutsche Bank said in a statement on Wednesday that it had reached a settlement of 31 euros ($34.53) per share with more than 80 plaintiffs as proposed by the bank. Deutsche Bank said this would allow Germany’s largest bank to free up capital and boost its third-quarter pretax profit forecast by 430 million euros.
At 11:48 a.m. in London, Deutsche Bank shares were up 2.96%, near their highest level in a month.
Bank stocks fell sharply Second quarter results A report released on July 24 showed the bank’s first net loss in four years, mainly due to a 1.3 billion euro ($1.45 billion) provision for the Postbank case.
That includes the largest individual plaintiffs, accounting for about a third of the claims, the bank said Wednesday.
A series of institutional and private investors have filed lawsuits against Deutsche Bank, claiming the bank underpaid fees. Multi-stage collection Postbank is a German retail bank with millions of customers. The agencies merged in 2018.
Deutsche Bank share price.
“If Deutsche Bank reaches a settlement agreement with other plaintiffs, it could have a further positive impact on total provisions for litigation,” Deutsche Bank said.
The claims have plagued the bank for more than a decade. The Cologne Higher Regional Court dismissed all claims in the lawsuit in 2020, but this ruling was rejected by the German Federal Court in 2022 and remanded back to the Higher Regional Court for a new judgment.
Numerous claims remain pending.
Jan Bayer, a senior partner at law firm Bayer Kraus Huber, which represents about 50 mostly institutional claimants, said his clients rejected the settlement. bayer Called last week The quoted price of 36.5 euros per PostBank share is a “late low price”.
Bayer told CNBC on Thursday that the acceptance had “no impact on any other claimants.”
JPMorgan analysts said in a note Thursday that they estimate the settlement will increase Deutsche Bank’s common equity tier 1 capital, a measure of the bank’s solvency, by about 10 basis points, which stood at 13.5% at the end of the second quarter.
“Overall, we view the settlement as positive and moving toward eliminating long-pending litigation issues,” they said.
They added that they did not expect the settlement to result in a second tranche of share buybacks this year, which the bank had previously announced in its second-quarter results was unlikely.
JPMorgan said Deutsche Bank “needs to demonstrate to the market continued capital generation to accommodate increased dividends, taking into account a number of outstanding issues such as the European Central Bank’s industry-wide leveraged finance review”.
